One Disadvantage of a Sole Proprietorship as a Form of Businessorganization

question 27

Multiple Choice

One disadvantage of a sole proprietorship as a form of businessorganization is that

• A)sole proprietorships cannot lower the transaction costs associated with contracting with resource owners
• B)sole proprietorships are less efficient than corporations, because they are less specialized in
• Production
• C)owners of sole proprietorships can lose all their personal assets if the business is sued or fails
• D)owners of sole proprietorships generally find it difficult to negotiate separation agreements with the
• Other partners in the firm
• E)owners of sole proprietorships generally have very little control over how they operate their businesses

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Definitions:

Uncertainty

The state of having limited knowledge where it is impossible to exactly describe the existing state, a future outcome, or more than one possible outcome.

Personal Selling

A direct marketing approach where salespeople personally communicate with potential buyers to promote and sell products or services.

Salesperson

An individual who sells goods and services to other entities, usually in exchange for money.

Credit And Debit Cards

are financial tools used for electronic transactions; credit cards allow borrowing against a line of credit, while debit cards withdraw funds directly from a bank account.